Guarantor Financial Information | Guarantor Financial Information On April 25, 2014 , the Company issued $900.0 million in aggregate principal amount of the 2022 Notes and on March 26, 2015 , the Company issued $400.0 million in aggregate principal amount of the 2023 Notes. The obligations under the Notes are fully and unconditionally guaranteed by the Guarantors, subject to release provisions described in Note 3. The Company’s subsidiaries that constitute its midstream segment, including the Partnership, are unrestricted subsidiaries under the indentures governing the Notes and consequently are not Guarantors. In accordance with positions established by the SEC, the following shows separate financial information with respect to the Company, the Guarantors and the non-guarantor subsidiaries. The principal elimination entries eliminate investment in subsidiaries and certain intercompany balances and transactions. Condensed Consolidated Balance Sheet as of September 30, 2015 (in thousands) Parent Guarantors Non-Guarantors Eliminations Consolidated Assets Current assets: Cash $ 98,218 $ 80,165 $ 37,701 $ — $ 216,084 Accounts receivable 209 212,890 11,237 — 224,336 Receivable from affiliates 32,200 (34,120 ) 1,981 — 61 Prepaid expenses and other assets 3,510 1,658 645 — 5,813 Derivative assets 35,903 121,573 — — 157,476 Total current assets 170,040 382,166 51,564 — 603,770 Investments in subsidiaries 2,656,435 138,775 — (2,795,210 ) — Gas collateral account — 3,995 41 — 4,036 Property, plant and equipment, net 11,621 2,308,174 802,267 (20,749 ) 3,101,313 Deferred financing costs, net 25,769 — 4,309 — 30,078 Goodwill — 294,908 39,142 — 334,050 Intangible assets, net — — 46,568 — 46,568 Derivative assets 22,518 83,277 — — 105,795 Deferred tax asset 71,485 — — (71,485 ) — Total assets $ 2,957,868 $ 3,211,295 $ 943,891 $ (2,887,444 ) $ 4,225,610 Liabilities and stockholders’ equity Current liabilities: Accounts payable 4,978 77,614 43,041 — 125,633 Royalties payables — 54,141 — — 54,141 Accrued capital expenditures — 42,629 56,057 — 98,686 Accrued interest 38,421 — 224 — 38,645 Leasehold payables — 21,907 — — 21,907 Deferred tax liabilities 14,088 49,398 — — 63,486 Payable to affiliate — — — — — Other accrued liabilities 12,544 32,214 1,645 — 46,403 Total current liabilities 70,031 277,903 100,967 — 448,901 Long-term liabilities: Long-term debt 1,297,128 — 224,000 — 1,521,128 Leasehold payable — 7,010 — — 7,010 Deferred tax liabilities — 258,951 27,250 (71,485 ) 214,716 Other long-term liabilities 3,239 10,996 2,293 — 16,528 Total liabilities 1,370,398 554,860 354,510 (71,485 ) 2,208,283 Stockholders’ equity before noncontrolling interest 1,587,470 2,656,435 138,775 (2,815,959 ) 1,566,721 Noncontrolling interest — — 450,606 — 450,606 Total liabilities and stockholders’ equity $ 2,957,868 $ 3,211,295 $ 943,891 $ (2,887,444 ) $ 4,225,610 Condensed Consolidated Balance Sheet as of December 31, 2014 (in thousands) Parent Guarantors Non-Guarantors Eliminations Consolidated Assets Current assets: Cash $ 181,835 $ 41,934 $ 32,361 $ — $ 256,130 Accounts receivable 1,773 196,974 1,153 — 199,900 Receivable from affiliates 634 55 2,198 (2,799 ) 88 Prepaid expenses and other assets 1,296 1,702 341 — 3,339 Derivative assets 47,291 85,743 — — 133,034 Total current assets 232,829 326,408 36,053 (2,799 ) 592,491 Investments in subsidiaries 2,177,895 86,148 — (2,264,043 ) — Gas collateral account — 3,995 — — 3,995 Property, plant and equipment, net 10,348 1,986,856 464,127 — 2,461,331 Deferred financing costs, net 20,081 — 5,022 — 25,103 Goodwill — 294,908 39,142 — 334,050 Intangible assets, net — — 47,791 — 47,791 Other non-current assets 8,290 54,898 — — 63,188 Total assets $ 2,449,443 $ 2,753,213 $ 592,135 $ (2,266,842 ) $ 3,527,949 Liabilities and stockholders’ equity Current liabilities: Current portion of long-term debt $ — $ 680 $ — $ — $ 680 Accounts payable 19,231 101,132 31,966 — 152,329 Royalties payables — 37,172 — — 37,172 Accrued capital expenditures 1,515 89,858 16,917 — 108,290 Accrued interest 9,375 — — — 9,375 Leasehold payables — 30,702 — — 30,702 Deferred tax liabilities 54,688 39,197 — (39,197 ) 54,688 Other accrued liabilities 16,652 27,502 2,086 (2,801 ) 43,439 Total current liabilities 101,461 326,243 50,969 (41,998 ) 436,675 Long-term liabilities: Long-term debt 900,000 — — — 900,000 Deferred tax liabilities 12,497 237,155 10,660 (51,094 ) 209,218 Leasehold payable — 4,279 — — 4,279 Other long-term liabilities 3,068 7,641 1,900 — 12,609 Total liabilities 1,017,026 575,318 63,529 (93,092 ) 1,562,781 Stockholders’ equity before noncontrolling interest 1,432,417 2,177,895 86,148 (2,173,750 ) 1,522,710 Noncontrolling interest — — 442,458 — 442,458 Total liabilities and stockholders’ equity $ 2,449,443 $ 2,753,213 $ 592,135 $ (2,266,842 ) $ 3,527,949 Condensed Consolidated Statement of Operations for the Three Months Ended September 30, 2015 (in thousands) Parent Guarantors Non-Guarantors Eliminations Consolidated Operating revenues: Natural gas, oil and NGL sales $ — $ 130,145 $ — $ — $ 130,145 Firm transportation sales, net — 88 — — 88 Gathering, compression and water distribution — — 38,766 (25,378 ) 13,388 Total operating revenues — 130,233 38,766 (25,378 ) 143,621 Operating expenses: Lease operating — 12,325 — — 12,325 Gathering, compression and transportation — 41,654 — (17,406 ) 24,248 Production taxes and impact fees — 1,955 — — 1,955 Exploration — 830 — — 830 Midstream operation and maintenance — — 4,831 — 4,831 Incentive unit income — (453 ) (233 ) — (686 ) Stock compensation expense — 2,657 1,557 — 4,214 General and administrative — 18,592 5,521 — 24,113 Depreciation, depletion and amortization — 84,408 5,345 (478 ) 89,275 Amortization of intangible assets — — 408 — 408 Other income — (71 ) (194 ) — (265 ) Total operating expenses — 161,897 17,235 (17,884 ) 161,248 Operating (loss) income — (31,664 ) 21,531 (7,494 ) (17,627 ) Interest expense (22,424 ) (88 ) (1,437 ) — (23,949 ) Other income 170 506 22 — 698 Gain on derivative instruments 31,175 95,897 — — 127,072 Amortization of deferred financing costs (1,060 ) — (253 ) — (1,313 ) Equity income (loss) in affiliate 41,444 (981 ) — (40,463 ) — Income (loss) before income taxes 49,305 63,670 19,863 (47,957 ) 84,881 Income tax (expense) benefit (19,797 ) (23,092 ) (6,350 ) 29,442 (19,797 ) Net income (loss) 29,508 40,578 13,513 (18,515 ) 65,084 Less: Net income attributable to the noncontrolling interests — — (6,134 ) — (6,134 ) Net income (loss) attributable to Rice Energy $ 29,508 $ 40,578 $ 7,379 $ (18,515 ) $ 58,950 Condensed Consolidated Statement of Operations for the Three Months Ended September 30, 2014 (in thousands) Parent Guarantors Non-Guarantors Eliminations Consolidated Operating revenues: Natural gas, oil and NGL sales $ — $ 67,831 $ — $ — $ 67,831 Firm transportation sales, net — 9,733 — — 9,733 Gathering, compression and water distribution — — 1,620 (57 ) 1,563 Total operating revenues — 77,564 1,620 (57 ) 79,127 Operating expenses: Lease operating — 4,553 — — 4,553 Gathering, compression and transportation — 8,049 — (57 ) 7,992 Production taxes and impact fees — 1,114 — — 1,114 Exploration — 623 — — 623 Midstream operation and maintenance — (515 ) 2,244 — 1,729 Incentive unit expense — 19,468 6,950 — 26,418 Stock compensation expense — 1,786 272 — 2,058 General and administrative — 10,341 117 — 10,458 Depreciation, depletion and amortization — 32,854 999 — 33,853 Acquisition expense — 160 2,086 — 2,246 Amortization of intangible assets — — 408 — 408 Total operating expenses — 78,433 13,076 (57 ) 91,452 Operating loss — (869 ) (11,456 ) — (12,325 ) Interest expense (14,665 ) (1,089 ) — — (15,754 ) Other income (expense) 190 (406 ) — — (216 ) Gain on derivative instruments — 36,935 — — 36,935 Amortization of deferred financing costs (707 ) — — — (707 ) Loss on extinguishment of debt — (790 ) — — (790 ) Equity in income (loss) of affiliate 5,603 (9,335 ) — 3,732 — Income (loss) before income taxes (9,579 ) 24,446 (11,456 ) 3,732 7,143 Income tax (expense) benefit (14,005 ) (18,840 ) 2,119 16,721 (14,005 ) Net (loss) income (23,584 ) 5,606 (9,337 ) 20,453 (6,862 ) Less: Net income attributable to the noncontrolling interests — — — — — Net (loss) income attributable to Rice Energy $ (23,584 ) $ 5,606 $ (9,337 ) $ 20,453 $ (6,862 ) Condensed Consolidated Statement of Operations for the Nine Months Ended September 30, 2015 (in thousands) Parent Guarantors Non-Guarantors Eliminations Consolidated Operating revenues: Natural gas, oil and NGL sales $ — $ 327,947 $ — $ — $ 327,947 Firm transportation sales, net — 3,353 — — 3,353 Gathering, compression and water distribution — — 103,025 (68,270 ) 34,755 Total operating revenues — 331,300 103,025 (68,270 ) 366,055 Operating expenses: Lease operating — 35,006 — — 35,006 Gathering, compression and transportation — 102,021 — (46,511 ) 55,510 Production taxes and impact fees — 5,103 — — 5,103 Exploration — 1,925 — — 1,925 Midstream operation and maintenance — — 10,963 — 10,963 Incentive unit expense — 43,930 1,940 — 45,870 Stock compensation expense — 7,889 3,792 — 11,681 General and administrative — 48,007 14,021 — 62,028 Depreciation, depletion and amortization — 216,665 12,341 (1,010 ) 227,996 Amortization of intangible assets — — 1,224 — 1,224 Other expense — 2,979 645 — 3,624 Total operating expenses — 463,525 44,926 (47,521 ) 460,930 Operating (loss) income — (132,225 ) 58,099 (20,749 ) (94,875 ) Interest expense (60,232 ) (137 ) (3,068 ) — (63,437 ) Other income 526 1,338 30 — 1,894 Gain on derivative instruments 40,274 144,455 — — 184,729 Amortization of deferred financing costs (2,966 ) — (756 ) — (3,722 ) Equity (loss) income in affiliate (28,127 ) (921 ) — 29,048 — (Loss) income before income taxes (50,525 ) 12,510 54,305 8,299 24,589 Income tax (expense) benefit (18,335 ) (41,647 ) (16,634 ) 58,281 (18,335 ) Net (loss) income (68,860 ) (29,137 ) 37,671 66,580 6,254 Less: Net income attributable to the noncontrolling interests — — (16,833 ) — (16,833 ) Net (loss) income attributable to Rice Energy $ (68,860 ) $ (29,137 ) $ 20,838 $ 66,580 $ (10,579 ) Condensed Consolidated Statement of Operations for the Nine Months Ended September 30, 2014 (in thousands) Parent Guarantors Non-Guarantors Eliminations Consolidated Operating revenues: Natural gas, oil and NGL sales $ — $ 246,816 $ — $ — $ 246,816 Firm transportation sales, net — 11,851 — — 11,851 Gathering, compression and water distribution — — 3,080 (202 ) 2,878 Total operating revenues — 258,667 3,080 (202 ) 261,545 Operating expenses: Lease operating — 16,406 — — 16,406 Gathering, compression and transportation — 22,666 — (202 ) 22,464 Production taxes and impact fees — 2,624 — — 2,624 Exploration — 1,582 — — 1,582 Midstream operation and maintenance — — 3,564 — 3,564 Incentive unit expense — 90,032 11,663 — 101,695 Stock compensation expense — 2,871 403 — 3,274 General and administrative — 29,340 7,393 — 36,733 Depreciation, depletion and amortization — 89,316 2,596 — 91,912 Acquisition expense — 160 2,086 — 2,246 Amortization of intangible assets — — 748 — 748 Total operating expenses — 254,997 28,453 (202 ) 283,248 Operating loss — 3,670 (25,373 ) — (21,703 ) Interest expense (24,917 ) (13,820 ) — — (38,737 ) Gain on purchase of Marcellus joint venture — 203,579 — — 203,579 Other income (expense) 210 (30 ) — — 180 Loss on derivative instruments — 5,357 — — 5,357 Amortization of deferred financing costs (1,239 ) (489 ) — — (1,728 ) Loss on extinguishment of debt — (3,934 ) — — (3,934 ) Write-off of deferred financing costs — (6,896 ) — — (6,896 ) Equity loss of joint ventures — (2,656 ) — — (2,656 ) Equity in income (loss) of affiliate 136,220 (16,842 ) — (119,378 ) — Income (loss) before income taxes 110,274 167,939 (25,373 ) (119,378 ) 133,462 Income tax (expense) benefit (18,787 ) (31,720 ) 8,532 23,188 (18,787 ) Net income (loss) 91,487 136,219 (16,841 ) (96,190 ) 114,675 Less: Net income attributable to the noncontrolling interests — — — — — Net income (loss) attributable to Rice Energy $ 91,487 $ 136,219 $ (16,841 ) $ (96,190 ) $ 114,675 Condensed Consolidated Statement of Cash Flows for the Nine Months Ended September 30, 2015 (in thousands) Parent Guarantors Non-Guarantors Eliminations Consolidated Net cash provided by (used in) operating activities $ (47,935 ) $ 275,383 $ 64,707 $ (21,759 ) $ 270,396 Capital expenditures for property and equipment (3,885 ) (634,654 ) (303,126 ) 21,759 (919,906 ) Proceeds from sale of interest in gas properties — 10,201 — — 10,201 Investment in subsidiaries (419,385 ) (31,386 ) — 450,771 — Net cash (used in) provided by investing activities (423,270 ) (655,839 ) (303,126 ) 472,530 (909,705 ) Proceeds from borrowings 411,932 — 224,000 — 635,932 Repayments of debt obligations (15,692 ) (698 ) — — (16,390 ) Debt issuance costs (8,652 ) — (44 ) — (8,696 ) Offering costs related to the Partnership’s IPO — — (129 ) — (129 ) Distributions to the Partnership’s public unitholders — — (11,454 ) — (11,454 ) Parent distributions, net — 419,385 31,386 (450,771 ) — Net cash provided by (used in) financing activities 387,588 418,687 243,759 (450,771 ) 599,263 Increase (decrease) in cash (83,617 ) 38,231 5,340 — (40,046 ) Cash, beginning of year 181,835 41,934 32,361 — 256,130 Cash, end of period $ 98,218 $ 80,165 $ 37,701 $ — $ 216,084 Condensed Consolidated Statement of Cash Flows for the Nine Months Ended September 30, 2014 (in thousands) Parent Guarantors Non-Guarantors Eliminations Consolidated Net cash provided by (used in) operating activities $ 12,393 $ 51,176 $ 6,110 $ — $ 69,679 Capital expenditures for property and equipment (7,358 ) — (404,876 ) — (230,174 ) — — (642,408 ) Investment in subsidiaries (1,572,448 ) (226,808 ) — 1,799,256 — Acquisition of Marcellus JV, net of cash acquired — (82,766 ) — — (82,766 ) Acquisition of Greene County assets — (329,469 ) — — (329,469 ) Acquisition of Momentum assets — (111,447 ) — — (111,447 ) Proceeds from sale of interest in gas properties 11,542 — — 11,542 Net cash provided by (used in) investing activities (1,579,806 ) (1,143,824 ) (230,174 ) 1,799,256 (1,154,548 ) Proceeds from borrowings 900,000 — — — 900,000 Repayments of debt obligations — (498,983 ) — — (498,983 ) Restricted cash for convertible debt — 8,268 — — 8,268 Debt issuance costs (24,283 ) 5,744 (862 ) — (19,401 ) Costs relating to IPO (1,412 ) — — — (1,412 ) Proceeds from conversion of warrants — 1,975 — — 1,975 Proceeds from issuance of common stock sold in IPO, net of underwriting fees 598,500 — — — 598,500 Costs relating to August 2014 Equity Offering (784 ) — — — (784 ) Proceeds from issuance of common stock in August 2014 Equity Offering, net of underwriting fees 197,072 — — — 197,072 Parent contributions, net — 1,572,448 226,808 (1,799,256 ) — Net cash provided by (used in) financing activities 1,669,093 1,089,452 225,946 (1,799,256 ) 1,185,235 Increase (decrease) in cash 101,680 (3,196 ) 1,882 — 100,366 Cash, beginning of year — 31,408 204 — 31,612 Cash, end of period $ 101,680 $ 28,212 $ 2,086 $ — $ 131,978 |